Regarding Correlation and Causation,if We Observe a Positive Correlation Between

question 42

Short Answer

Regarding correlation and causation,if we observe a positive correlation between two variables,we cannot conclude that there is a ____________________ relationship between the two variables.

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Definitions:

Correlation

The tendency of two variables to move together.

Two-asset Portfolio

It is a financial portfolio comprising two different assets, aimed at diversifying investment risk.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

CAPM

Capital Asset Pricing Model, a formula used to determine the expected return on an investment based on its risk relative to the market.